Prices were still on the upward march on the cotton market on Wednesday amid talks that the government should or should not ban export of cotton yarn, dealers said. The official spot rate was unchanged at Rs 4,375, they said. In the ready business, rates showed significant rise as approximately 20,000 bales of cotton changed hands between Rs 4325-4550. Phutti prices were higher in Sindh and Punjab at Rs 1800-2250, they added.
Some analysts said that it looks very difficult for the government to ban the export of cotton yarn. In fact, through exports of cotton yarn the country is earning foreign exchange, otherwise, falling trend was seen in most of the other exporting items.
The value-added industry is making hue and cry over the export of best quality of yarn, which is causing shortage of the same in the local market, they added. And other major factor is rendering several people jobless. The government should take measures to solve the issue in a good manner. Steady trend in the market is giving an impression that the prices may go up in the near future, they said.
In the meantime, the good development is that cotton production is good as many cotton producing countries facing shortage of crop due to several factors, such as China. According to an official report, output for 2009-10 cotton crop will be more than 12.5 million bales, compared with 11.8 million bales the previous year.
Pakistan is the world's fourth biggest cotton producer but often has to import to meet the demand of its textile sector, which accounts for about 60 percent of total exports. In the late evening on Wednesday to settle the issue over the export of cotton yarn the Economic Co-ordination Committee (ECC) has removed five percent import duty on the cotton yarn, dealers said.
The government officials had earlier estimated about 12 million bales in the crop year ending in March after pest and virus attacks in the major cotton-growing area of Punjab province. Besides, according to reports released in China on Wednesday, the official estimates for China's 2009 cotton output ranged from 6.4 million tonnes to 6.7 million tonnes, more than 10 percent decline from 2008.
On the Tuesday the US cotton futures finished lower on investor profit-taking although many players were out for the year-end holidays and brokers said dealings should stay thin this week and next. The cotton market will close early on Thursday, December. 24, and be shut for Christmas, December 25, which falls on Friday. The cotton market will also shut next Friday, January. 1, for New Year's Day.
The benchmark March cotton contract settled down 1.16 cents at 73.80 cents per lb after dealing between 73.52 and 75.25 cents. Last Wednesday, the contract closed at 76.25 cents in the highest finish for cotton based on the spot daily charts since the end of February 2008. Volume traded in the March contract hit 13,322 lots at 2:34 pm EST (1934 GMT).
THE FOLLOWING DEALS REPORTED: 1000 bales of cotton from Shahdadpur sold at Rs 4325-4400, 1000 bales from Shahpur Chaker at Rs 4400, 2000 bales from Sanghar at Rs 4300-4400, 1000 bales from Sultanabad at Rs 4325, 400 bales from Hala at Rs 4400, 3000 bales from upper Sindh at Rs 4500-4550, 2500 bales from Rahim Yar Khan at Rs 4500-4550, 4000 bales from Khan Pur at Rs 4500, 400 bales from Rajan Pur at Rs 4450, 400 bales from Ghazi Ghat at Rs 4450, 600 bales from Sadiqabad at Rs 4500, 600 bales from Mureedwala at Rs 4450, 1000 bales from Haroonabad at Rs 4380 and 800 bales from Khanewal at Rs 4450.
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The KCA Official Spot Rate for Local Dealings in Pak Rupees
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FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"
MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
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Rate Ex-Gin Upcountry Spot Rate Ex-Karachi
for Price Sales Tax @ 15%
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37.324 Kgs 4,375.00 100 4,475.00
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Equivalent
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40 Kgs 4,689.00 100 4,789.00
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